The UK has exited recession as the economy gains momentum marked by two closely monitored surveys indicating a "turning point" in growth.
Research conducted by BDO, the consultancy, revealed that output in March surged to its highest level since May 2022, coinciding with a decline in inflation to its lowest level in over three years. The BDO Output Index rose to 102.39, surpassing the 100-point threshold that distinguishes growth from contraction. This increase was driven by enhanced activity in both the services and manufacturing sectors.
Kaley Crossthwaite, partner at BDO, said: “Output reaching its highest point in nearly two years illustrates the UK’s robustness in the face of global economic adversities and is a big step towards economic stability and growth.”
The data corroborated findings from other surveys indicating expectations of imminent interest rate cuts and a moderation in price growth, which bolstered output last month. Purchasing managers' indices for the services, manufacturing, and construction sectors in March all surpassed the 50-point threshold that delineates growth from contraction. This marks the first instance since June 2022 that all three readings have signalled growth.
In the latter half of last year, the economy slipped into recession, experiencing contractions of 0.1 percent and 0.3 percent in the third and fourth quarters, respectively. The International Monetary Fund, set to unveil forecasts this week, anticipates the UK economy will grow by 0.6 percent this year.
